Managerial Accounting, 8e

by Hartgraves, Morse

ISBN: 978-1-61853-235-0 | Copyright 2018


Welcome to Managerial Accounting 8e!

Our book presents managerial accounting in the context of a big-picture, decision oriented, business setting. It integrates traditional coverage with contemporary topics, and does so with an eye toward the general business student because a book is not useful if it is not read. An overriding aim of our book is to engage students to read further and understand the materials presented.

Target Audience

Our book is written for all students—not just accounting students. We place managerial accounting in a broad business context, relating it to other business areas. We also avoid details that are appropriate for advanced cost accounting books. Like the trunk of a tree, our book serves as a strong base for students’ future knowledge growth and as a means of unifying the branches of business management.

For overviews of the textbook, table of contents, features and end of chapter material, please watch the videos below.

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A quick review of the TOC and approach of the textbook is highlighted in the following video.

The End of Chapter material and Assignments are reviewed in the following video.

Approach and Emphasis

Managerial accounting focuses on using financial and nonfinancial information by managers and associates of a firm to make strategic, organizational, and operational decisions. Our book provides a framework for identifying and analyzing decision alternatives and for evaluating success or failure in accomplishing such organizational goals. Although accountants are important in the managerial accounting process, managerial accounting is more about managerial tools than processes. In our era of global competition, continuous improvement, process reengineering, and employee empowerment; the tools of managerial accounting are used by decision makers at all levels, rather than just by “managers.” One goal of our book is to introduce students to this reality.

We emphasize the use of managerial accounting information for decision making within the context of organizational strategy. The organization and content of our book reflect our belief that students who understand the big picture are better learners, are better decision makers, and are better able to apply what they learn.


Managerial ethics receives extensive coverage in this edition. For example, ethics is introduced in the context of measurement and management in Chapter 1 and discussed further in Chapters 4 and 9. Business Insight features and numerous end-of-chapter problems and cases in Chapters 1, 3, 8, 9, 10, and 11 include a variety of decision situations involving ethical dilemmas. The following excerpt is from Chapter 9 and discusses ethical dimensions of the budgeting measurement and management in Chapter 1 and discussed further in Chapters 4 and 9. Business Insight features and numerous end-of-chapter problems and cases in Chapters 1, 3, 8, 9, 10, and 11 include a variety of decision situations involving ethical dilemmas. The following excerpt is from Chapter 9 and discusses ethical dimensions of the budgeting process:


Unique Pedagogy

Managerial Accounting includes several special features specifically designed to engage students and help them succeed in this course.

Business Insights

Students appreciate and become more engaged when they can see the relevance of what they are learning in the classroom. We have revised and added new Business Insight boxes throughout each chapter to bring the accounting to life for students through current, real-world examples. The following is a representative example:


Decision Making Orientation

One primary goal of a managerial accounting course is to teach students the skills needed to apply their accounting knowledge to solve real business problems and make informed business decisions. With that goal in mind, Managerial Decision boxes in each chapter encourage students to apply the material presented to solving actual business scenarios. The following is a representative example:


Research Insights

Academic research plays an important role in the way business is conducted, accounting is performed, and students are taught. It is important for students to recognize how modern research and modern business practice interact. Therefore, we periodically incorporate relevant research to help students understand the important relation between research and modern business. The following is a representative example:



Managerial accounting can be challenging—especially for students lacking business experience or previous exposure to business courses. To reinforce concepts presented in each chapter and to ensure student comprehension, we include in-chapter reviews for each Learning Objective per chapter that require students to recall and apply the managerial accounting techniques and concepts just described. The following is a representative example:


Excellent assignment material is a must-have component of any successful textbook (and class). We went to great lengths to create the best assignments possible. We tried to include assignments that reflect our belief that students should be trained in analyzing accounting information to make business decisions, as opposed to working on mechanical computations. Assignments encourage students to analyze accounting information, interpret it, and apply the knowledge gained to a business decision. There are five categories of assignments: Questions, Mini Exercises, Exercises, Problems, and Cases and Projects. The following is a representative example:


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Road Map
LO Learning Objective | Topics Page eLecture Guided Example Assignments

Identify basic patterns of how costs respond to changes in activity cost drivers.

Cost Behavior Patterns :: Variable Costs :: Fixed Costs :: Mixed Costs :: Step Costs :: Factors Affecting Cost Behavior

11, 12, 13, 14


Determine a linear total cost estimating equation.

Total Cost Function :: Relevant Range :: Economic vs Accounting Cost Structures :: Additional Cost Behavior Patterns :: Committed and Discretionary Fixed Costs

13, 14, 15, 16, 17, 19, 20, 21, 22, 23, 24, 25


Calculate and compare three different approaches to cost estimation.

High-Low Cost Estimation :: Scatter Diagrams :: Least Squares Regression

13, 14, 18, 19, 20, 21, 22, 23, 24, 25, 29, 30, 33, 34, 35


Identify and discuss problems encountered in cost estimation.

Additional Issues :: Changes in Technology and Prices :: Matching Activity and Costs :: Identifying Activity Cost Drivers



Describe the accounting for common control business combinations and the pooling-of-interests method.

Alternative Classifications :: Manufacturing Cost Hierarchy :: Customer Cost Hierarchy

26, 27, 28, 32

Expand/Collapse All
Preface (pg. iii)
Brief Contents (pg. ix)
Contents (pg. x)
Chapter 1: Managerial Accounting: Tools for Decision Making (pg. 2)
ModCloth (pg. 2)
Uses of Accounting Information (pg. 4)
Financial Accounting (pg. 4)
Managerial Accounting (pg. 5)
Review 1-1 (pg. 7)
Strategic Cost Management (pg. 7)
Review 1-2 (pg. 7)
Missions, Goals, and Strategies (pg. 8)
An Organization’s Mission and Goals (pg. 8)
Strategic Position Analysis (pg. 9)
Managerial Accounting and Goal Attainment (pg. 11)
Planning, Organizing, and Controlling (pg. 12)
Review 1-3 (pg. 14)
Changing Environment of Business (pg. 14)
Global Competition and Its Key Dimensions (pg. 14)
Big Data and Analysis (pg. 14)
Enterprise Risk Management (ERM) (pg. 15)
Review 1-4 (pg. 15)
Ethics in Managerial Accounting (pg. 15)
Codes of Ethics (pg. 16)
Corporate Governance (pg. 17)
Sustainability Accounting and Corporate Social Responsibility (pg. 18)
Review 1-5 (pg. 18)
Cost Drivers (pg. 19)
Structural Cost Drivers (pg. 19)
Organizational Cost Drivers (pg. 20)
Activity Cost Drivers (pg. 21)
Review 1-6 (pg. 22)
 Guidance Answers (pg. 22)
 Key Terms (pg. 22)
 Multiple Choice (pg. 22)
Questions (pg. 23)
Mini Exercises (pg. 24)
Exercises (pg. 26)
Cases and Projects (pg. 27)
Solutions to Review Problems (pg. 29)
Chapter 2: Cost Behavior, Activity Analysis, and Cost Estimation (pg. 32)
Square, Inc. (pg. 32)
Cost Behavior Analysis (pg. 34)
Four Basic Cost Behavior Patterns (pg. 34)
Factors Affecting Cost Behavior Patterns (pg. 36)
Review 2-1 (pg. 37)
Total Cost Function for an Organization or Segment (pg. 37)
Relevant Range (pg. 38)
Additional Cost Behavior Patterns (pg. 40)
Committed and Discretionary Fixed Costs (pg. 42)
Review 2-2 (pg. 42)
Cost Estimation (pg. 42)
High-Low Cost Estimation (pg. 43)
Scatter Diagrams (pg. 44)
Least-Squares Regression (pg. 45)
Review 2-3 (pg. 48)
Additional Issues in Cost Estimation (pg. 48)
Changes in Technology and Prices (pg. 48)
Matching Activity and Costs (pg. 49)
Identifying Activity Cost Drivers (pg. 49)
Review 2-4 (pg. 49)
Alternative Cost Driver Classifications (pg. 49)
Manufacturing Cost Hierarchy (pg. 50)
Customer Cost Hierarchy (pg. 51)
Review 2-5 (pg. 52)
Guidance Answers  (pg. 53)
Key Ratios  (pg. 53)
 Key Terms (pg. 54)
 Multiple Choice (pg. 54)
Questions (pg. 55)
Mini Exercises (pg. 56)
Exercises (pg. 58)
Problems (pg. 61)
Cases and Projects (pg. 63)
Solutions to Review Problems (pg. 66)
Chapter 3: Cost-Volume-Profit Analysis and Planning (pg. 68)
Razor USA, LLC (pg. 68)
Cost-Volume-Profit Analysis (pg. 70)
Key Assumptions (pg. 71)
Profit Formula (pg. 72)
Review 3-1 (pg. 74)
Contribution and Functional Income Statements (pg. 74)
Contribution Income Statement (pg. 74)
Functional Income Statement (pg. 75)
Analysis Using Contribution Margin Ratio (pg. 75)
Review 3-2 (pg. 76)
Break-Even Point and Profit Planning (pg. 76)
Determining Break-Even Point in Units (pg. 76)
Profit Planning (pg. 78)
Cost-Volume-Profit Graph (pg. 79)
Profit-Volume Graph (pg. 79)
Impact of Income Taxes (pg. 81)
Review 3-3 (pg. 82)
Multiple-Product Cost-Volume-Profit Analysis (pg. 82)
Determining Break-Even and Target Profit Sales Dollars (pg. 82)
Sales Mix Analysis (pg. 84)
Review 3-4 (pg. 86)
Analysis of Operating Leverage (pg. 86)
 Appendix 3A: Profitability Analysis with Unit and Nonunit Cost Drivers (pg. 88)
Multi-Level Contribution Income Statement (pg. 88)
Variations in Multi-Level Contribution Income Statement (pg. 90)
Review 3-6 (pg. 91)
Guidance Answers (pg. 91)
 Key Ratios (pg. 92)
 Key Terms (pg. 92)
 Multiple Choice  (pg. 92)
Questions (pg. 94)
Mini Exercises (pg. 94)
Exercises (pg. 96)
Problems (pg. 100)
Cases and Projects (pg. 105)
Solutions to Review Problems (pg. 106)
Chapter 4: Relevant Costs and Benefits for Decision Making (pg. 110)
Uber (pg. 110)
Identifying Relevant Costs (pg. 112)
Relevance of Future Revenues (pg. 113)
Relevance of Outlay Costs (pg. 113)
Irrelevance of Sunk Costs (pg. 114)
Sunk Costs Can Cause Ethical Dilemmas (pg. 114)
Relevance of Disposal and Salvage Values (pg. 115)
Relevance of Opportunity Costs (pg. 115)
Review 4-1 (pg. 116)
Differential Analysis of Relevant Costs (pg. 116)
Review 4-2 (pg. 117)
Applying Differential Analysis (pg. 117)
Multiple Changes in Profit Plans (pg. 118)
Review 4-3 (pg. 119)
Special Orders (pg. 119)
Review 4-4 (pg. 122)
Outsourcing Decisions (Make or Buy) (pg. 122)
Review 4-5 (pg. 126)
Sell or Process Further (pg. 126)
Review 4-6 (pg. 128)
Use of Limited Resources (pg. 128)
Single Constraint (pg. 128)
Multiple Constraints (pg. 129)
Theory of Constraints (pg. 130)
Limitations of Decision Analysis Models (pg. 131)
Review 4-7 (pg. 131)
Guidance Answers (pg. 131)
 Key Terms (pg. 132)
 Multiple Choice (pg. 132)
Questions (pg. 133)
Mini Exercises (pg. 134)
Exercises (pg. 137)
Problems (pg. 140)
Cases and Projects (pg. 144)
Solutions to Review Problems (pg. 148)
Chapter 5: Product Costing: Job and Process Operations (pg. 152)
Samsung (pg. 152)
Inventory Costs in Various Organizations (pg. 154)
Review 5-1­ (pg. 156)
Inventory Costs for Financial Reporting (pg. 156)
Product Costs and Period Costs (pg. 156)
Three Components of Product Costs (pg. 156)
A Closer Look at Manufacturing Overhead (pg. 158)
Review 5-2 (pg. 160)
The Production Environment (pg. 160)
Production Files and Records (pg. 161)
Review 5-3 (pg. 162)
Job Costing for Products and Services (pg. 162)
Job Costing Illustrated (pg. 163)
Statement of Cost of Goods Manufactured (pg. 167)
Overapplied and Underapplied Overhead (pg. 169)
Job Costing in Service Organizations (pg. 170)
Review 5-4 (pg. 171)
Process Costing (pg. 172)
Cost of Production Report (pg. 173)
Weighted Average and First-In, First-Out Process Costing (pg. 176)
Process Costing in Service Organizations (pg. 176)
Review 5-5 (pg. 177)
 Appendix 5A: Absorption and Variable Costing (pg. 178)
Basic Concepts (pg. 178)
Income Under Absorption and Variable Costing (pg. 179)
Production Equals Sales (pg. 179)
Production Exceeds Sales (pg. 179)
Sales Exceed Production (pg. 181)
Evaluating Alternatives to Inventory Valuation (pg. 182)
Review 5-6 (pg. 183)
Guidance Answers  (pg. 183)
Key Ratios  (pg. 183)
 Key Terms (pg. 184)
 Multiple Choice (pg. 184)
Questions (pg. 185)
Mini Exercises (pg. 186)
Exercises (pg. 188)
Problems (pg. 192)
Cases and Projects (pg. 199)
Solutions to Review Problems (pg. 201)
Chapter 6: Activity-Based Costing, Customer Profitability, and Activity-Based Management (pg. 206)
Unilever (pg. 206)
Activity-Based Costing (ABC) (pg. 208)
Changing Cost Environment (pg. 208)
LO1 Review 6-1 (pg. 209)
Activity-Based Costing Concepts (pg. 209)
ABC Product Costing Model (pg. 210)
Review 6-2 (pg. 211)
Traditional Product Costing and ABC Compared (pg. 212)
Applying Overhead with a Plantwide Rate (pg. 212)
Applying Overhead with Department Rates (pg. 212)
Applying Overhead with Activity-Based Costing (pg. 214)
LO3 Review 6-3 (pg. 217)
Implementation of ABC (pg. 218)
Limitations of ABC Illustration (pg. 218)
Comparing Traditional and Activity-Based Costing (pg. 218)
ABC Implementation Issues (pg. 219)
Review 6-4 (pg. 220)
ABC and Customer Profitability Analysis (pg. 221)
Customer Profitability Profile (pg. 221)
ABC Customer Profitability Analysis Illustrated (pg. 221)
Review 6-5 (pg. 224)
Activity-Based Management (pg. 224)
The Difference Between ABC and Activity-Based Management (pg. 224)
Review 6-6 (pg. 225)
Guidance Answers (pg. 225)
 Key Terms (pg. 226)
 Multiple Choice (pg. 226)
Questions (pg. 227)
Mini Exercises (pg. 227)
Exercises (pg. 231)
Problems (pg. 234)
Cases and Projects (pg. 239)
Solutions to Review Problems (pg. 243)
Chapter 7: Additional Topics in Product Costing (pg. 246)
Whole Foods (pg. 246)
Production and Service Department Costs (pg. 248)
Review 7-1 (pg. 249)
Service Department Cost Allocation (pg. 249)
Direct Method (pg. 250)
Step Method (pg. 251)
Linear Algebra (Reciprocal) Method (pg. 253)
Dual Rates (pg. 254)
Review 7-2 (pg. 255)
Lean Production and Just-in-Time Inventory Management (pg. 255)
Reducing Incoming Materials Inventory (pg. 256)
Reducing Work-in-Process Inventory (pg. 256)
Review 7-3 (pg. 258)
Performance Evaluation and Recordkeeping with Lean Production and JIT (pg. 258)
Performance Evaluation (pg. 258)
Simplified Recordkeeping (pg. 260)
Review 7-4 (pg. 261)
Increased Focus on Data-Driven Decision Making (pg. 261)
Review 7-5 (pg. 262)
 Guidance Answers (pg. 262)
Key Ratios  (pg. 263)
Key Terms  (pg. 263)
Multiple Choice  (pg. 263)
Questions (pg. 264)
Mini Exercises (pg. 265)
Exercises (pg. 267)
Problems (pg. 269)
Cases and Projects (pg. 273)
Solutions to Review Problems (pg. 274)
Chapter 8: Pricing and Other Product Management Decisions (pg. 278)
Roku (pg. 278)
Understanding the Value Chain (pg. 280)
Usefulness of a Value Chain Perspective (pg. 282)
Value-Added and Value Chain Perspectives (pg. 284)
Review 8-1­ (pg. 284)
The Pricing Decision (pg. 284)
Economic Approaches to Pricing (pg. 284)
Cost-Based Approaches to Pricing (pg. 285)
Review 8-2 (pg. 288)
Target Costing (pg. 289)
Target Costing Is Proactive for Cost Management (pg. 289)
Target Costing Encourages Design for Production (pg. 290)
Target Costing Reduces Time to Introduce Products (pg. 291)
Target Costing Requires Cost Information (pg. 291)
Target Costing Requires Coordination (pg. 291)
Target Costing is Key for Products with Short Life Cycles (pg. 292)
Target Costing Helps Manage Life Cycle Costs (pg. 293)
Review 8-3 (pg. 294)
Continuous Improvement Costing (pg. 294)
Review 8-4 (pg. 295)
Benchmarking (pg. 296)
Review 8-5 (pg. 297)
Guidance Answers  (pg. 297)
Key Ratios  (pg. 297)
Key Terms  (pg. 297)
Multiple Choice  (pg. 297)
Questions (pg. 298)
Mini Exercises (pg. 299)
Exercises (pg. 300)
Problems (pg. 302)
Cases and Projects (pg. 304)
Solutions to Review Problems (pg. 305)
Chapter 9: Operational Budgeting and Profit Planning (pg. 308)
Pinterest (pg. 308)
Reasons for Budgeting (pg. 310)
Compel Planning (pg. 310)
Promote Communication and Coordination (pg. 310)
Provide a Guide to Action and Basis of Evaluation (pg. 311)
Aid in Risk Management (pg. 311)
Review 9-1 (pg. 311)
General Approaches to Budgeting (pg. 311)
Output/Input Approach (pg. 311)
Activity-Based Approach (pg. 312)
Incremental Approach (pg. 312)
Minimum Level Approach (pg. 313)
Review 9-2 (pg. 314)
Master Budget (pg. 314)
Sales Budget (pg. 316)
Purchases Budget (pg. 317)
Selling Expense Budget (pg. 318)
General and Administrative Expense Budget (pg. 318)
Cash Budget (pg. 319)
Budgeted Financial Statements (pg. 321)
Finalizing the Budget (pg. 322)
Review 9-3 (pg. 323)
Budget Development in Manufacturing Organizations (pg. 323)
Production Budget (pg. 324)
Manufacturing Cost Budget (pg. 325)
Review 9-4 (pg. 327)
Budget Development and Manager Behavior (pg. 328)
Employee Participation (pg. 328)
Budgeting Periods (pg. 329)
Forecasts (pg. 329)
Ethics (pg. 330)
Open Book Management (pg. 330)
Review 9-5 (pg. 331)
Guidance Answers  (pg. 331)
Key Terms  (pg. 331)
Multiple Choice  (pg. 331)
Questions (pg. 333)
Mini Exercises (pg. 333)
Exercises (pg. 335)
Problems (pg. 340)
Cases and Projects (pg. 345)
Solutions to Review Problems (pg. 347)
Chapter 10: Standard Costs and Performance Reports (pg. 354)
Southwest Airlines (pg. 354)
Responsibility Accounting (pg. 356)
Performance Reporting and Organization Structures (pg. 357)
Types of Responsibility Centers (pg. 357)
Financial and Nonfinancial Performance Measures (pg. 359)
Review10-1 (pg. 359)
Performance Reporting for Cost Centers (pg. 359)
Development of Flexible Budgets (pg. 359)
Flexible Budgets Emphasize Performance (pg. 360)
Standard Costs and Performance Reports (pg. 361)
Review 10-2 (pg. 362)
Variance Analysis for Costs (pg. 362)
Components of Standard Cost Analysis (pg. 362)
Establishing and Using Standards for Direct Materials (pg. 363)
Review 10-3 (pg. 366)
Establishing and Using Standards for Direct Labor (pg. 366)
Review 10-4 (pg. 368)
Establishing and Using Standards for Variable Overhead (pg. 369)
Fixed Overhead Variances (pg. 371)
Review 10-5 (pg. 371)
Performance Reports for Revenue Centers (pg. 372)
Inclusion of Controllable Costs (pg. 373)
Revenue Centers as Profit Centers (pg. 374)
Review 10-6 (pg. 375)
Appendix 10A: Fixed Overhead Variances   (pg. 375)
Review 10-6 (pg. 377)
Appendix 10B: Reconciling Budgeted and Actual Income  (pg. 377)
Review 10-8 (pg. 378)
Guidance Answers  (pg. 379)
Key Ratios  (pg. 379)
Key Terms  (pg. 379)
Multiple Choice  (pg. 379)
Questions (pg. 380)
Mini Exercises (pg. 381)
Exercises (pg. 383)
Problems (pg. 385)
Cases and Projects (pg. 391)
Solutions to Review Problems (pg. 393)
Chapter 11: Segment Reporting, Transfer Pricing, and Balanced Scorecard (pg. 398)
Volkswagen (pg. 398)
Strategic Business Segments and Segment Reporting (pg. 400)
Multilevel Segment Income Statements (pg. 402)
Interpreting Segment Reports (pg. 402)
Review 11-1 (pg. 404)
Transfer Pricing (pg. 405)
Management Considerations (pg. 405)
Determining Transfer Prices (pg. 407)
Review 11-2 (pg. 410)
Investment Center Evaluation Measures (pg. 410)
Return on Investment (pg. 410)
Investment Center Income (pg. 413)
Investment Center Asset Base (pg. 414)
Other Valuation Issues (pg. 414)
Residual Income (pg. 414)
Economic Value Added (pg. 415)
Which Measure Is Best? (pg. 416)
Review 11-3 (pg. 417)
Balanced Scorecard (pg. 418)
Balanced Scorecard Framework (pg. 418)
Balanced Scorecard and Strategy (pg. 420)
Review 11-4 (pg. 421)
 Guidance Answers (pg. 422)
 Key Ratios (pg. 422)
 Key Terms (pg. 422)
 Multiple Choice (pg. 422)
Questions (pg. 424)
Mini Exercises (pg. 424)
Exercises (pg. 428)
Problems (pg. 431)
Cases and Projects (pg. 436)
Solutions to Review Problems (pg. 438)
Chapter 12: Capital Budgeting Decisions (pg. 442)
Amazon (pg. 442)
Long-Range Planning and Capital Budgeting (pg. 445)
Review 12-1 (pg. 447)
Capital Budgeting Models that Consider Time Value of Money (pg. 448)
Expected Cash Flows (pg. 448)
Manager Behavior and Expected Cash Flows (pg. 449)
Net Present Value (pg. 449)
Internal Rate of Return (pg. 451)
Cost of Capital (pg. 452)
Review 12-2 (pg. 452)
Capital Budgeting Models That Do Not Consider Time Value of Money (pg. 453)
Payback Period (pg. 453)
Accounting Rate of Return (pg. 454)
Review 12-3 (pg. 455)
Evaluation of Capital Budgeting Models (pg. 455)
Review 12-4 (pg. 457)
Additional Aspects of Capital Budgeting (pg. 458)
Using Multiple Investment Criteria (pg. 458)
Evaluating Risk (pg. 458)
Differential Analysis of Project Cash Flows (pg. 459)
Predicting Differential Costs and Revenues for High-Tech Investments (pg. 460)
Review 12-5 (pg. 462)
Taxes in Capital Budgeting Decisions (pg. 462)
Depreciation Tax Shield (pg. 462)
Investment Tax Credit (pg. 465)
Appendix 12A: Time Value of Money  (pg. 465)
Future Value (pg. 465)
Present Value (pg. 466)
Annuities (pg. 467)
Unequal Cash Flows (pg. 469)
Review 12-7 (pg. 470)
 Appendix 12B: Table Approach to Determining Internal Rate of Return (pg. 470)
Equal Cash Inflows (pg. 470)
Unequal Cash Inflows (pg. 471)
 Guidance Answers (pg. 472)
 Key Ratios (pg. 472)
Key Terms  (pg. 473)
Multiple Choice  (pg. 473)
Questions (pg. 474)
Mini Exercises (pg. 475)
Exercises (pg. 476)
Problems (pg. 479)
Cases and Projects (pg. 481)
Solutions to Review Problems (pg. 486)
Appendix A: Managerial Analysis of Financial Statements (pg. 492)
Financial Statement Analysis for Managers (pg. 494)
Review Appendix A-1 (pg. 495)
Factors Impacting Financial Statement Analysis (pg. 495)
Review Appendix A-2 (pg. 496)
Application of Financial Statement Analysis (pg. 496)
Evaluative Standards and Benchmarks (pg. 496)
Comparative and Common Size Statements (pg. 497)
Review Appendix A-3 (pg. 499)
Solvency Analysis (pg. 501)
Review Appendix A-4 (pg. 504)
Performance Analysis (pg. 504)
Horizontal Analysis of Solvency and Performance (pg. 507)
Industry Benchmarking of Analysis Measures (pg. 509)
Review Appendix A-5 (pg. 511)
Key Terms  (pg. 511)
Questions  (pg. 511)
Mini Exercises (pg. 512)
Exercises (pg. 514)
Problems (pg. 515)
Cases and Projects (pg. 517)
Solutions to Review Problems (pg. 519)
Glossary (pg. 523)
Index (pg. 533)
Al L. Hartgraves

Al L. Hartgraves

Al L. Hartgraves is Professor Emeritus of Accounting at the Goizueta Business School at Emory University in Atlanta, Georgia. He has been a frequent Guest Professor at Johannes Kepler University in Linz, Austria and at the Helsinki School of Economics and Business Administration in Finland.

His published scholarly and professional articles have appeared in The Accounting Review, Accounting Horizons, Management Accounting, Journal of Accountancy, Journal of Accounting and Public Policy and many other journals. Students at Goizueta Business School have selected him on six occasions to receive the Distinguished Educator Award. In 2002 he received Emory University’s highest teaching award, The Scholar/Teacher Award, and in 2003 he was recognized as the Accounting Educator of the Year by the Georgia Society of CPAs. He has been recognized as an Outstanding Faculty Member in two editions of The Business Week Guide to the Best Business Schools. He is a Certified Public Accountant (inactive) and a Certified Management Accountant, having received the Certificate of Distinguished Performance on the CMA exam. He received his Ph.D. from Georgia State University.

Wayne J. Morse

Wayne J. Morse

Wayne J. Morse, a hiking and canoeing enthusiast, is Professor Emeritus at the Saunders College of Business at Rochester Institute of Technology.

An author or coauthor of more than fifty published papers, monographs, and textbooks, he was a founding member of the Management Accounting section of the American Accounting Association. His most notable writings are in the areas of learning curves, human resource accounting, and quality costs. He was a member of the IMA Committee on Research and an AICPA Board of Examiners subcommittee, and he has served on the editorial boards of Advances in Accounting, Trends in Accounting Education, Issues in Accounting Education, and Management Accounting Research. A Certified Public Accountant, he received his Ph.D. from Michigan State University. Prior to joining RIT, he was on the faculty of the University of Illinois, Duke University, the University of Tennessee, Clarkson University, and the University of Alabama-Huntsville.

Last Updated: Dec 10 2019

Corrections to identified errors in the text.

Practice Quizzes
Last Updated: Jun 22 2017

Brief practice quizzes containing multiple choice questions for each chapter.

Practice Quiz Solutions
Last Updated: Jun 22 2017

Solutions to brief practice quizzes.

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